The Arkansas Senate passed HB 1497 (see my 3/10 post for more details about the bill) and transmitted it to the governor for approval. Assuming the governor signs or does not veto the bill, Arkansas should be the first state to enact Revised Article 1 this year. (Brooklyn's Neil Cohen called my attention to the fact that the same bill includes the 2002 amendments to UCC Articles 3 and 4 and that this would make Arkansas the second state to adopt those amendments. Thus far, only Minnesota has done so.)

Elsewhere, New Mexico's House Judiciary Committee unanimously recommended passage of, and its House of Representatives unanimously passed, HB 834. The bill is now before the New Mexico Senate Judiciary Committee.

And, the Illinois Senate's Judiciary Committee unanimously recommended passage of SB 1647. If enacted in its present form, Illinois SB 1647 would make Illinois the first state to adopt uniform R1-301.

An employer who breaches an employment contract by failing to appropriate money to a bonus pool cannot subsequently enforce an employee non-compete clause, even when the employee is terminated for cause, according to the Florida Court of Appeals.

Carl Domino sold his business to Northern Trust, but agreed to stay on under an employment agreement that contained a non-compete clause that would apply if he quit or were fired "for cause." The contract also required Northern to set aside $7 million for bonuses. Northern only put $4 million in the bonus pool, and Domino complained. He subsequently was fired for improper expense reports and soliciting another company employee to leave.

Northern sued for an injunction against Domino. The court held, however, that by failing to fund the bonus pool, it was not in material compliance with the contract, and one who was itself in breach could not claim the equitable remedy of an injunction.

The world of free contract is making inroads in the international shipping business, where so-called non-vessel operating common carriers (NVOCCs) have been freed from restrictions and are now in the process of evolving contract mechanisms for doing business. Steven W. Block of Seattle’s Betts Patterson Mines has an interesting discussion of what's going on.

A "clear and ambiguous" liquidated damages clause that is conceded to be reasonable will be enforced in its plain language, according to the California Court of Appeals in an unpublished opinion, and oral testimony as to some consistent oral understanding will not be admitted.

The real estate contract at issue required the buyers to pay certain amounts for each day the deal was in escrow, but it also required an up-front payment of $700,000. The contract said that this amount would be seller’s "sole and exclusive remedy in damages." When the deal went sour, the sellers sued, arguing that the liquidated damages were in addition to the daily amounts that were supposed to have been paid and proffering evidence of such an understanding.

No dice, said the court, holding that the language was clear and unambiguous, and no party argued that it was unreasonable. Oral testimony as to some other agreement was therefore barred, and the court affirmed summary judgment for the defendants.

Michael Corleone: Well, when Johnny [Fontaine] was first starting out, he was signed to this contract with a big-band leader. And as his career got better and better he wanted to get out of it. Now, Johnny is my father’s godson. My father went to see the bandleader, with a contract for $10,000 to let Johnny go, but the bandleader said no. So the next day, my father went to see the bandleader again, only this time with Luca Brasi. Within an hour, the bandleader signed the release, with a certified check of $1,000.